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CIRCULAR No. 32/2003/TT-BTC OF APRIL 16, 2003 GUIDING THE IMPLEMENTATION OF ARTICLES 29 AND 30 OF THE CUSTOMS LAW AND ARTICLE 8 OF THE GOVERNMENT'S DECREE No. 101/2001/ND-CP OF DECEMBER 31, 2001 DETAILING THE IMPLEMENTATION OF A NUMBER OF ARTICLES OF THE CUSTOMS LAW REGARDING CUSTOMS PROCEDURES AND CUSTOMS INSPECTION AND SUPERVISION REGIME

Pursuant to Customs Law No. 29/2001/QH10 passed on June 29, 2001 by the Xth National Assembly of the Socialist Republic of Vietnam at its 9th session;

Pursuant to the Government's Decree No. 101/2001/ND-CP of December 31, 2001 detailing the implementation of a number of articles of the Customs Law regarding customs procedures and customs inspection and supervision regime;

The Ministry of Finance hereby guides customs procedures and customs inspection and supervisions regime as follows:

A. GENERAL PROVISIONS

1. All export and import goods must be inspected by the customs offices in one of the forms specified in Article 30 of the Customs Law.

2. The actual inspection of goods shall be conducted by customs officers directly or by means of machinery and technical devices and other professional measures.

3. The customs offices at all levels shall have to collect and exchange information with one another in order to build up a database on the process of customs legislation observance by goods owners, on export and import management policies, nature, categories and origin of export and import goods, and other information related thereto, so as to anticipate the inspection forms and percentages of goods to be actually inspected.

4. On the basis of the above-said database and information on goods owners and goods lots from the manifests provided by the ships, the Customs Sub-Department directors shall analyze cases one by one and anticipate the form of actual inspection applicable to each goods lot. At the time when the goods owners carry out customs procedures for their goods lots, if no more information arises, the goods lots shall be inspected in the forms as anticipated.

If there is new information which renders it necessary to change the inspection forms or the percentages of goods to be actually inspected, the Customs Sub-Department directors shall decide on appropriate inspection forms.

B. SPECIFIC GUIDANCE

I. BASES FOR DECIDING ON FORMS OF ACTUAL INSPECTION OF EXPORT AND IMPORT GOODS

When considering and deciding on the forms of actual inspection of goods, the Customs Sub-Department directors shall base themselves on:

1. The process of observance of the customs legislation by goods owners with regard to export and/or import goods;

2. Current export and import management policies;

3. The nature, categories and origin of export and import goods;

4. Customs dossiers;

5. Other information related to export and import goods.

Of the above bases, the primary base is the process of observance of the customs legislation by goods owners. This base must be considered first and foremost before other bases when deciding and selecting the specific inspection forms.

II. SPECIFIC BASES AND FORMS OF ACTUAL INSPECTION

1. Exemption from actual inspection of goods:

a/ For export goods:

a.1. Export goods owners must, within one export year counting to the date the customs procedures are carried out for their export goods lots, not be handled for customs-related administrative violations or have been handled for customs-related administrative violations subject to fine levels falling within the sanctioning competence of the Customs Sub-Department directors; and at the time the customs procedures are carried out, the customs offices have no other information on law observance by the goods owners and on their goods lots.

a.2. The following export goods items of goods owners which satisfy the conditions specified at Point a.1 above shall be exempt from actual inspection: farm and aquatic goods; textiles and garments; footwear, natural rubber; fresh and raw foodstuffs; processed foodstuffs; goods requiring special preservation; mechanical engineering and electric goods; liquid goods, bulk goods and goods items whose volumes, quality and categories must be determined on the basis of conclusions of competent State bodies or expertise organizations; export goods of export-processing zone enterprises, regularly exported goods; other goods prescribed by the Government.

a.3. For enterprises which have been engaged in export and/or import activities for a short period of time not long enough for consideration of their law observance process under the provisions at Point a.1 while their export goods fall into the subjects specified at Point a.2 above, the customs offices shall conduct actual inspection of goods for a number of first exportations; if the enterprises observe the customs legislation well, their goods exported subsequently shall be exempt from actual inspection.

For other export goods, the inspection thereof shall comply with the provisions of the Customs Law and Decree No. 101/2001/ND-CP.

a.4. For products processed for export which are exempt from actual inspection, they are also exempt from comparison with samples of imported raw materials thereof when their customs procedures are carried out. Enterprises shall be answerable to law for the correct use of imported raw materials to produce such export goods.

b/ For import goods:

b.1. Import goods owners must, within two export years counting to the date the customs procedures are carried out for their import goods lots, not be handled for customs-related administrative violations or have been handled for customs-related administrative violations subject to fine levels falling within the sanctioning competence of the Customs Sub-Department directors; and at the time the customs procedures are carried out, the customs offices have no other information on law observance by the goods owners and on their goods lots.

b.2. The following import goods items of goods owners which satisfy the conditions specified at Point b.1. above shall be exempt from actual inspection: equipment and devices; fresh and raw foodstuffs; goods requiring special preservation; goods deposited in bonded warehouses and tax-suspension warehouses; import goods to be taken into export-processing zones, tax-suspension warehouses or other customs-privilege zones; liquid goods, bulk goods and goods items whose volumes, quality and categories must be determined on the basis of conclusions of competent State bodies or expertise organizations; regularly imported goods; other goods prescribed by the Government.

b.3. For enterprises which have been engaged in export and/or import activities for a short period of time not long enough for consideration of their law observance process under the provisions at Point b.1 while their import goods fall into the subjects specified at Point b.2 above, the customs offices shall conduct actual inspection of goods for a number of first importations; if the enterprises observe the customs legislation well, for their subsequently imported goods, the customs offices shall conduct unexpected inspection by the probability method according to regulation.

For other import goods, the inspection thereof shall comply with the provisions of the Customs Law and Decree No. 101/2001/ND-CP.

b.4. For raw materials imported for export processing, if they fall into the subjects exempt from actual inspection, their samples must still be taken for use as a basis for inspection upon export and post-customs clearance inspection. The directors of the Customs Sub-Departments which manage processing contracts shall decide on which raw materials to be sampled. The customs offices of the import border gates shall take samples and seal them up according to the regulations on sampling of processing raw materials.

2. Actual inspection of goods by the probability method:

a/ The form of probability inspection shall apply to the following cases:

- Cases not exempt from inspection as prescribed at Point 1 above;

- Cases not subject to inspection of the whole of goods lots as prescribed at Point 3 below;

- Cases where goods owners are exempt from inspection but their goods are not on the list of those exempt from actual inspection.

b/ Actual inspection percentages:

- For export goods: The inspection percentage is 3% or 5% for each export goods lot.

- For import goods: The inspection percentage is 5% or 10% for each import goods lot.

3. Actual inspection of the whole of goods lots:

Actual inspection of the whole of goods lots shall apply to the following cases:

a/ Case 1:

- Goods owners have been handled for customs-related administrative violations for more than three times within a period of two years counting to the time of carrying out customs procedures for the import goods lots or within a period of one year counting to the time of carrying out customs procedures for the export goods lots with fine levels falling beyond the sanctioning competence of the Customs Sub-Department directors.

- Within the prescribed time limits (two years for import goods and one year for export goods), goods owners have been once handled for customs-related administrative violations with fine levels beyond the sanctioning competence of the directors of the provincial/municipal Customs Departments.

b/ Case 2:

If detecting that the export or import goods lots of goods owners who have not committed many violations show signs of violation of the customs legislation, the customs offices shall inspect the whole of such export or import goods lots under the provisions at paragraph c, Item 6, Article 8 of Decree No. 101/2001/ND-CP.

4. If enterprises are detected to have abused their entitlement to exemption from actual inspection of goods to export or import goods at variance with their customs declarations, they shall be immediately not allowed to enjoy this form of exemption from inspection and their subsequent export or import goods lots shall be wholly inspected under the provisions at Point c, Clause 1, Article 30 of the Customs Law.

If enterprises are detected to have abused the goods inspection by probability method to export or import goods at variance with their customs declarations, their export or import goods shall be wholly inspected immediately.

If enterprises which process goods for export or import raw materials for production of export goods are detected to have abused their entitlement to exemption from actual inspection of goods or percentage inspection to export goods less than or import goods in excess of their customs declarations, the provincial/municipal Customs Departments shall inspect and scrutinize all liquidated dossiers or refunded import tax amounts of these enterprises and, if detecting any violations, sanction them according to the law provisions.

5. Competence to decide on and change the inspection forms:

a/ Basing themselves on the criteria stated at Points 1, 2 and 3 above, the Customs Sub-Department directors shall decide on the forms of actual inspection of goods.

b/ If the export or import goods lots have been registered at the outside-border gate Customs Sub-Departments but the actual inspection thereof is conducted by the border-gate Customs Sub-Departments, the border-gate Customs Sub-Department directors shall base themselves on the situation of actual inspection of goods to decide to increase or reduce the inspection percentages while keeping unchanged the inspection form.

c/ In the process of clearing customs procedures for export or import goods lots, if new information arises, which renders it necessary to change the inspection form, then

- The Customs Sub-Department directors shall decide to change the inspection form previously decided by themselves.

- The provincial/municipal Customs Department directors shall decide to change the inspection form decided by the Customs Sub-Department directors (even by those of other provinces or cities).

6. Regularly exported or imported goods items prescribed in Article 30 of the Customs Law and Article 8 of Decree No. 101/2001/ND-CP of December 31. 2001 are understood as goods items which the enterprises specialize in exporting and/or importing, including also imported raw materials and products processed for export, imported raw materials for the production of export goods and export products.

C. ORGANIZATION OF IMPLEMENTATION

1. The application of the forms of exemption from actual inspection of goods and probability inspection must be effected in combination with the following professional measures:

a/ The Customs Sub-Department directors must promptly organize the review of dossiers so as to detect and handle in time errors, mistakes and frauds, or report on those falling beyond their competence to the provincial/municipal Customs Department directors for direction; organize forces and intensify supervision and control in border-gate areas so as to support the customs procedure clearance in accordance with law.

b/ The provincial/municipal Customs Department directors must organize forces and step up the advisory work against smuggling, the customs control, collect and analyze information so as to detect and handle in time cases of law violation, and report on those cases falling beyond their competence to the General Director of Customs.

c/ Basing themselves on the review of dossiers processed by the border-gates Customs Sub-Departments as well as information supplied by advisory units under the Customs Departments and other information sources, the directors of the Customs Departments shall consider and decide in time on the post-customs clearance inspection of cases which show signs of law violation or errors and/or mistakes detected when the customs clearance procedures are carried out for the goods.

2. This Circular takes effect 15 days after its publication in the Official Gazette and replaces Decision No. 1557/2001/QD-TCHQ of December 28, 2001, Article 8 of the Decision No. 19/2002/QD-TCHQ of January 10, 2002 and other guiding documents of the General Department of Customs regarding this matter.

If facing any problems in the course of implementation, units and business establishments should report them to the Ministry of Finance for study and additional guidance.

For the Minister of Finance

Vice Minister
TRUONG CHI TRUNG